Drilling resumes after Thompson Divide spill

Following a mid-June spill of more than 2,300 gallons of chemicals, wastewater and drill “cuttings,” for which the Texas gas drilling company SG Interests was ordered on June 20 to shut down the well in question, drilling has resumed.

The well is located in the southernmost portion of the controversial Thompson Divide region, and following a brief interruption to clean up the spill, the company is back in business at the same well, according to an official with the U.S. Bureau of Land Management, which leased the site of the well to the company a decade ago.

But at least one local group, Wilderness Workshop of Carbondale, is questioning both the legality of the lease in question, and the motives of the company, which a workshop spokesman said might have been trying to get around federal leasing rules to hold onto the leases for certain parcels that otherwise might have expired.

SGI, founded in 1989 with drilling interests in Colorado, New Mexico and Texas, is one of two drilling companies, along with Ursa Resources, that have been locked in a public relations and legal battle for years over their plans to drill for natural gas in the Thompson Divide region near Carbondale.

Organizations in Carbondale, as well as municipal governments up and down the Roaring Fork Valley, have resisted the companies’ efforts, and last year the BLM cancelled 25 leases in the Thompson Divide, including 18 leases held by SGI, basically validating critics’ claims that the leases were not legally issued and should have expired.

The drilling site where the June spill occurred, discovered by BLM inspectors before it was reported to the Colorado Oil and Gas Conservation Commission, was one of several leases that were subject to a request for “suspension” in early May because of a lack of drilling activity and a looming expiration date of May 31 (leases normally expire after 10 years if no drilling has occurred), according to Peter Hart, an attorney for Wilderness Workshop.

The Workshop, Hart said, in June filed a legal request for a formal review of the suspension after it had been granted by the BLM, questioning whether it was granted legally under the federal agency’s own rules.

Then, in a complex series of maneuvers, SGI began drilling operations on the lease before the suspension legally took effect, which prompted the BLM to retroactively terminate its suspension. That allowed SGI to keep drilling — at least until the spill occurred and the BLM concluded it had been operating in a way not allowed under the permit.

Once the spill was cleaned up, according to David Boyd, public information officer for the BLM, the agency allowed drilling to resume on June 23.

When questioned about the timing of the suspension and subsequent official actions, Boyd said he would need to examine the paperwork to determine if everything was done legally and above board, but would be unable to do so for some time as he was working as the PIO (public information officer) on a fire in the Breckenridge area.

“It’s complicated,” Boyd remarked, explaining that “there are some leases that were getting ready to expire” in the area around the site involved in the spill.

He indicated that SGI had moved to “unitize” those wells — meaning clump them together in a production group of leases that can remain valid despite expiration dates if there is at least one active well in the “unit.”

And the well where the spill occurred, he said, “was being drilled as an obligation well … to hold the unit.”

“It seems that the narrative here is, a company starts tossing off a bunch of different proposals to try and hold the acreage,” Hart said, explaining that his organization believes it was not an entirely legal effort under federal gas-drilling rules.

“This company is notorious for doing this,” Hart said of SGI.

The Workshop’s interest, he added, is due to the fact that “this is all about lands that people really care about” — the Thompson Divide region, roughly 225,000 acres of relatively unspoiled land southwest of Carbondale.

Hart said he would be looking further into the legality of all aspects of the lease, the spill and other issues, and would not know for some time what action Wilderness Workshop might take in addition to its call for a review of the entire situation by the BLM’s state office.

Robert Guinn, vice president for land issues at SGI, could not be reached for comment for this story.